Question #9
Reading: Reading 6 Economic Growth
PDF File: Reading 6 Economic Growth.pdf
Page: 5
Status: Unattempted
Correct Answer: B
Question
Jon Barnton is studying the potential rate of economic growth in Barini, a large developed economy in Western Europe. He makes the following statement: 'Barini has seen a slowdown in GDP growth over the past decade, the likely causes being a slowdown in population growth, the wealth effect and increasing immigration.' Which of the factors stated by Barnton is least likely to explain the slowdown?
Answer Choices:
A. Wealth effect
B. Population growth
C. Immigration
Explanation
A slowdown in population growth is likely to constrain growth. The wealth effect reduces
total hours worked as individuals opt to take more leisure time. Immigration may offset
the slowdown in population growth.